ZK by numbers: L2 spends over $60 million on ZKP, zkRollup emerging gradually

Author: OurNetwork

Compiled by TechFlow

In this issue, we will focus on followZero-Knowledge Proof (Zero-Knowledge Proofs) - one of the most important but least understood technological breakthroughs in our industry. In this issue, we will explore the rise of zero knowledge, adoption, network health, and competitive dynamics at the application and infrastructure levels.

Why is this important:

In order for encryption to achieve true mainstream adoption globally, the Blockchains they rely on must become more scalable and efficient. For the world’s largest Layer 1 Blockchain ETH and its community, this has led them to adopt a strategy of actively embracing Layer 2 scaling solutions. L2 innovations like Optimism, Arbitrum, and Base have become the primary platforms for encryption users and applications, locking billions of dollars in value and having millions of active Addresses.

At the same time, Zero-Knowledge Proof (ZKPs) represents another important breakthrough in expanding solutions, theoretically their performance can far exceed existing infrastructure, and support a variety of new applications. Although this field is just getting started, we believe it is worth our follow due to the rapid progress it has made in a short period of time.

Although it is still early, the on-chain data supports the point that Cryptocurrency is undergoing a major transition to Zero-Knowledge Proof (ZKPs), first with ZKP applications, and then with ZKP-supported infrastructure such as Rollups. I would like to give special thanks to the NEBRA and OurNetwork teams, as well as the core data contributors Jackie (Dune) and Brandyn (OurNetwork). Without their support, none of this would be possible. We are now demonstrating this transition through data.

Quick Links: Dune Dashboard | Contribution Library | Nebra

① ZKP: Industry Health

Layer 2 solutions have spent over 60 million dollars on Zero-Knowledge Proofs.

The total Settlement Fees (TSF) paid by the ZKP project to the ETH network L1 exceeded $60.40 million, demonstrating significant adoption over time. In December 2023, TSF reached a peak of $15 million. In the past 30 days, the TSF for ZKP verification on the ETH network L1 was only $150,000, reflecting progress in cost optimization in this area.

Dune - @nebra

In 2023 and 2024, the active Address using ZKP continued to increase, reaching a peak of 7.6 million in March this year. Although the active Address in July 2024 dropped to 4.8 million, hitting the annual low, the average annual active Address was 6.4 million, more than double the monthly average of 3.2 million active Address in 2023, despite the overall market being in a summer slump.

Dune - @nebra

Last month, there were over 1.5 million proofs accumulated, but the number of ZK proofs settled on L1 blocks in 2024 decreased. In December 2023, the number of proofs settled on L1 reached a peak of 189,280.

Dune - @nebra

This trend is mainly due to a slight decrease in demand (active users), but more importantly, the advancement of technology, zkRollups adopts new technologies such as proof aggregation to reduce the number of proofs and TSF.

② ZKP: Project Trend

Linea generated 23.2 million ZKP transactions from 5.5 million users

In terms of ZKP user adoption, Linea is becoming a “successful” chain. In the past 30 days, the L2 has ranked first with 1.77 million independent active addresses, followed by zkSync’s 1.3 million and Scroll’s 950,000.

Dune - @nebra

In December 2023, Linea’s L1 spending on ZKP surged to $12.8 million, accounting for nearly 85% of all projects’ spending on ZKP that month, still the highest historical record for paying fees, mainly thanks to Linea’s Voyage XP program. Recently, in 2024, Scroll began to dominate the payment to L1’s TSF, and it is expected to further drop costs in the planned upgrade on August 21.

Dune - @nebra

③ ZKP: Infrastructure and Applications

The number of infrastructure using ZKP is more than 250 times that of the applications in use.

So far, a total of 16.6 million Addresses have triggered ZKP transactions through infrastructure, especially zkRollups, while only 62,780 Addresses have triggered ZKP transactions through applications.

Dune - @nebra

This obvious contrast has several key reasons. First, in August 2022, OFAC sanctioned Tornado Cash, a critical application that uses ZKP for privacy protection. This makes it illegal for US citizens to use Tornado Cash, leading to reduced use of ZKP in the application. Secondly, the Transaction Cost of each ZKP transaction at the infrastructure layer is significantly lower than that at the Application Layer—Linea’s 30-day average Transaction Cost is 0.00034 USD per transaction. Although the average Transaction Cost of the relatively expensive ZKP infrastructure Polygon zkEVM is 0.03 USD per transaction, it is still much lower than the Transaction Cost of top ZKP applications.

Dune - @nebra

With the dust settling on OFAC sanctions, the use of ZKP applications has seen a revival. Tornado Cash remains a relatively inexpensive ZK application in terms of Transaction Cost, averaging $1.0 over 30 days. Although this is not a completely comparable comparison due to the higher costs on L1, the cost of Tornado transactions is still about 33 times higher than Polygon zkEVM and about 3300 times higher than Linea.

Dune - @nebra

④ ZKP: Macro Trends

The top five Optimistic Rollups still dominate zkRollups in terms of active addresses, with a ratio of 4; however, this year zkRollups has approached a balance in the number of active addresses with Ethereum L1.

The active addresses of the top five Optimistic Rollups have risen this year, from 3.8 million in January 2024 (actually lower than zkRollups’ 4.8 million) to over 17.8 million. Although many zkRollup chains are still to be launched, it is worth noting that these solutions have attracted over half of the addresses on the ETH L1 chain in each full month. As of July, active addresses of zkRollups still account for 13% of the ETH L1 and the top five Optimistic Rollups market share.

Dune - Nebra

Last month, Linea of zkRollup ranked third in L2 with 1.8 million active addresses. Base leads all L2 with 11.5 million active addresses, followed closely by Arbitrum with 5.8 million.

Dune - Nebra

With the adoption of more efficient ZKP-related technologies in L2, the proportion of gas fees for ZKP contract calls has actually dropped to 0.14% of the 30-day rolling average. This is approximately 100 times the peak recorded, the latter of which occurred in December 2023 when ZKP transactions accounted for over 14% of the total gas fees on the Ethereum blockchain twice.

Dune - @nebra

ZK Proof: The Proof Singularity Future Brought by NEBRA

The key technology for extending the Block space of Zero-Knowledge Proof (ZKP) is proof aggregation, which integrates multiple proofs from different sources into a recursive proof to prove the validity of these proofs (i.e., aggregated proof).

Nebra

Proof aggregation protocols like NEBRA UPA significantly improve bandwidth and reduce the on-chain cost of Zero-Knowledge Proof. For example, in the current version of NEBRA UPA, the verification cost of Groth16 proof dropped from 300,000 gas to 18,000 gas, a cost reduction of more than 15 times. This is similar to the way data availability protocols (such as 4844, Celestia, EigenDA, and Avail) reduce the cost of data availability.

In addition, the proof aggregation can achieve the “proof singularity” claimed by Vitalik Buterin, that each Block contains only one aggregated proof. Proof aggregation is not only used to reduce the cost of on-chain ZKP verification, but also to achieve native interoperability and shared Settlement between zkRollups.

NEBRA’s launch of UPA and its future Rollup operating system on the ETH mainnet represents a significant breakthrough in the entire ZK field. With the arrival of proof singularities, the future of ZK and blockchain will be even brighter. Imagine if proofs can be aggregated, ETH could save over $39 million in costs!

Dune - @nebra

Concept:

Zero-Knowledge Proof (Zero Knowledge Proofs) allows for the verification of arbitrary computations using small cryptographic proofs and provides privacy protection. Applications and infrastructure typically have two ways of using Zero-Knowledge Proof:

• Protect Privacy
• Verifiable computation and scalability
• Nebra

Nebra

In these cases, Zero-Knowledge Proof is generated by combining user-specific data with publicly available on-chain data. Subsequently, these proofs are verified on-chain to execute certain subsequent business logic.

Privacy Protection App:

In terms of data flow, when Zero-Knowledge Proof is used for privacy protection applications, the generation of proofs needs to be done on the client side to avoid leaking sensitive user information (such as Private Key). In these applications, the user-controlled client (whether it is a browser or an application running on a mobile phone) will directly submit the proofs to the blockchain.

Example:

ZK-based identity solutions, such as Worldcoin

Privacy-preserving financial applications, such as tornado.cash and railgun

Extension solution:

When Zero-Knowledge Proof is used for scaling, the generation of the proof usually does not require the user’s sensitive data. Therefore, the proof generation can be delegated to more powerful servers or public clouds. Some scaling solutions utilize GPU acceleration to improve the throughput and latency of proof generation.

Example:

zkRollups, such as zkSync, Polygon zkEVM, Scroll, Starkware, and Linea

zkCoprocessors, such as Succinct, RISC Zero, Axiom, Brevis, and Lagrange

Methodology:

Through this dashboard, we are measuring three key metrics:

Total Settlement Fees (TSF): Refers to the total amount of ETH paid by users or extension solutions for on-chain verification of Zero-Knowledge Proofs. These fees can usually be decomposed into cryptographic-related precompiles called by the EVM (which will be explained in detail later).

Number of on-chain transactions: Number of transactions validating Zero-Knowledge Proof.

Active users: The number of users using ZK proof.

How do we measure?

We have implemented queries on Ethereum’s Dune indexed data to retrieve gas expenditures for ZKP verification. By identifying the correct contracts and transaction invocation methods, we have determined the relevant internal calls (see annotated data methodology in this section). These expenditures are primarily from invoking the following precompiles:

Nebra